2013 was a great year for high-tier hedge fund managers, even ones who pled guilty to securities fraud. The 25 highest paid hedge fund managers made over $21 billion in 2013, more than twice as much as all the kindergarten teachers in America combined. Whether those 25 men provided as great a benefit to our country as all the kindergarten teachers I will leave to you to divine, dear reader.

One of the those 25 was Steven Cohen of SAC Capital Advisors who made an estimated $2.5 billion in 2013. Sadly, that may be his last time on the list as after pleading guilty to securities fraud he can only manage his own immense fortune.

As the rich get richer the chair of President Obama’s Council of Economic Advisors, Jason Furman, has decided to take on Thomas Piketty’s work on inequality claiming the work is weak because it fails to account for unknowable changes in “inequality within labor income.” Oddly, Furman cites changes in public policy as something that could change the equation while not endorsing any public policies that would.

But Mr. Furman isn’t completely buying it. “This thesis is intriguing and an important source of concern,” he said, “although it is unclear how likely it is. Piketty’s prediction is that the capital share of income will rise, pushing in the direction of increased inequality. But this is only one of the determinants of inequality. While the trends may continue to shift in that direction, a more important factor to date has been the inequality within labor income, and while Piketty implicitly takes this to be fixed, there is no a priori basis to predict whether it will rise or fall in the future because it is a function of unpredictable technological developments, norms, institutions and public policies.”

Furman then goes on, strangely, to endorse raising the minimum wage to $10 an hour, trade deals like TPP, and greater access to preschool. In other words, an agenda that, if anything, will exacerbate inequality in income. “Free trade” is simply corporate exploitation and the results of the last decade for inequality speak for themselves. A small nudge in the minimum wage is not going to solve the yawning gap between the 1% and the 99%. Preschool is irrelevant to just about everything other than child safety and early development – which is a worthy goal but not going to do much about the wealth gap where hedge fund managers are paying a 15% tax rate thanks to the carried interest loophole (when they aren’t stashing their money offshore that is).

It is also worth noting that technology changes have not changed the basic dynamics of capitalism. Owners profit by reducing costs, such as paying their workers less. Hence in high tech Silicon Valley a conspiracy developed to suppress wages. Yes, even at the cutting edge of the economy there is a natural incentive to enrich oneself at the expense of one’s employees. This “inequality in labor income” will exist as long as capitalism does, it is a conflict written within the source code.

So if we follow President Obama’s chief economic adviser’s advice we are guaranteed to land in the Dickensian nightmare Piketty lays out.

Democrats have hitched their wagon to the identity politics star, gambling that women & nonwhites will vote D out of fear, so the Ds can rape them economically and still get their votes. Seems to be working.

Ds think oligarchy is OK as long as the white male serfs get dicked over too (except the rich ones, of course).

I find it deeply disturbing that one would choose to attack President Obama due to an ignorant and profoundly infantile statement made by one of his ‘advisers’.
Because of the poisoned atmosphere in D.C. President Obama has been forced to hire several individuals who are deemed acceptable to the extreme right. I’ve read numerous times that President Obama rarely if ever actually listens to or accepts advice from these ‘people’.
It’s one thing to criticize President Obama, but one must be certain that any such criticism is grounded in FACT not speculation. President obama has remarked many, many times that he is deeply concerned and painfully troubled by the horrifying inequality in this nation.
All deeply disturbed citizens MUST vote to support President Obama by insuring that the teabag extreme right does NOT take control this coming November.

Because of the poisoned atmosphere in D.C. President Obama has been forced to hire several individuals who are deemed acceptable to the extreme right. I’ve read numerous times that President Obama rarely if ever actually listens to or accepts advice from these ‘people’.

Thank you for explaining “look forward not back,” lack of single payer so well, and drones killing Muslims off kill lists reviewed by President Obama, and making us all less safe.

I’m sure those decision were made by some “bad apple,” no the Great Munificent Obama himself, and illustrate no trend whatsoever.

The buck stops where exactly? Somewhere down the food chin in the executive branch of the government?

Just who is running Public Relations at the White House? The White House should stay above the fray. Failing that the Democratic White House should always side with the little guy at least publicly.
Just why does the chair of President Obama’s Council of Economic Advisors Jason Furman think his view on this subject will matter?
Perhaps its because while Piketty has a best selling book on economics a book that isn’t boosted by bulk sales to Right Wing think tanks Jason Furman is a rock star everyone loves what he and Obama have done for the economy./s
Sending a nobody nobody ever heard of to criticize someone for being wrong when his own record on the economy sucks just reminds voters they are unhappy with the WH over the economy.

Nobody working at the White House speaks to the Press unless what they say is voted by the WH press office or they are speaking off the record. Therefore this statement has the WH’s approval and hints at Obama’s official WH economic policy. :(

They already fear us they give us cheap crappy charter schools they would not dare spread to the suburbs while they send their kids to private schools. This tells me they fear their kids can’t compete if school funding was equal for all students public and private.
On top of that they still need legacy admissions to get into colleges.
They fear us so much the Red States get more money from the federal government than they pay in taxes the Blue States are supporting them but Rep Ryan calls us a welfare dependent culture I would love to see how much federal cash his congressional district gets vs how much it pays in taxes then compare that to Chicago.
They fear us because they have to lie the facts don’t support them on the economy compare FDR vs Obama’s record. Climate Change the GOP won’t admit its real Obama still wants the keystone pipeline the insurance companies however want to raise rates because of climate change and deny coverage.
I could go on all day

Aside from the library the local McDonalds seems to be the place for the IT homeless to hang out during the day and I live in a relatively nice suburb Forest Park Ill. But if robots start making the food will even the homeless keep going to McD’s if the food quality drops further?

So we didn’t get health care reform, the war in Afghanistan drags on after more than twelve years, innocent people are still being killed in our name during drone strikes, domestic police forces are increasingly militarized, Keystone is in all likelihood going to go forward, we’re struggling just to get a raise in the minimum wage…and you think they’re afraid of us? Excuse me, but you’re not being realistic.

Well this relates back to a prior post today indicating that the so-called “Democrat” party is looking at bad polling numbers in the upcoming elections.

Who, in their right minds, would want to vote for this POS party? Not that the so-called “Republican” party is any better.

It has been proven incontrovertibly that neither party represents anyone in the 99%. Both parties suck at the tits of the corporations and the 1%.

Of course, Furman comes out with this disingenuous mind-numbing blathering propaganda. If anyone – no matter what their alleged political persuasion – chooses to accept these blatant lies, then more fool them.

And anyone who thinks Obama is still “on our side” needs their head examined. Get. A. Clue.

Also people who work fast food are often fast food customers fire the workers and you lose a good chunk of your customer base. Think if Henry Ford instead of deciding to pay his workers enough so they could buy his cars decided to hire robots and fired all his workers would all his workers magically find other jobs that let them buy cars? Would his ex workers buy his cars or buy anyone else’s cars but his?

This is infuriating. He seems to say we will agree to ten dollars an hour and you give us the TPP. I have never been a Marxist but his theory here, from what I understand, predicts this sort of thing. Money goes to the capitalist and the capitalist lives in a dog eat dog world and so he must constantly grow his business at whatever the cost, or he will be taken over by someone else. So wealth naturally accrues to the capitalist and he is always looking for another score, like TPP and globalism.

We are all at a distinct advantage and that includes anyone who works for someone else, as Alice X said yesterday. In the end it is power as well as wealth that separates us. Piketty got it right. Tax the bastards.

Loopholes for long term capital gains and carried interest need to be closed. And inheritance taxes on extreme wealth increased. I also think those earnings of the fools who run corporations and the like should be taxed very much higher.

Let the fuckers automate hamburgers. Why can’t we hire anyone who wants to work. Shit dig holes and fill them in again until we find something else to do.

In 2008, one guy talked about two America’s, and the majority of Democratic primary voters ran him down and stepped on the body to vote for a minority with documented corporatist ties. I’m theorizing Elizabeth Warren took note, and opted to sit this one out. She may agree with me, that apparently, things are going to need to get worse.

While it is fun and useful to bash Republicans, we need to get our own house in order. Would we vote for Liddy Dole or JC Watts?

QED.

FWIW, I am as WASPy as a Southerner can get, and an old white man to boot, and you just don’t know how the patriarchy pisses me off. I know the evil bastards’ mindset well. And I’d vote for a one-eyed, green, atheist lesbian from Mars if she had a demonstrated program to bring good jobs to ex-working Americans.

McD’s micro waves their biscuits and pancakes, they store the meat after its cooked in steamers to extend the amount of time they can serve you old meat. Food quality is way down since when I worked there adding robots might be cheaper but food quality will go down even further.

They fear that Russia, China, Iran, and others will start trading oil using another currency and not dollars.

every nation that threatens to stop using the petro dollar to trade oil is attacked by the USA.

they elites know, that the current economic system in the USA is not sustainable! revolutions have a way of starting in nations where there was once a middle class.

people don’t like it when their kids cry because they are hungry? and across town they see the rich throwing food away.

a cop said it best, you can’t kill a man who has no hope! he is already dead.

the elites also fear a leader of the people? eventually someone from the left probably will rise up and attack the RICH! “the robin hood effect”

Remember Paul Wellstone, “the elites probably had him killed”

“There are forces within the Democratic Party who want us to sound like kinder, gentler Republicans.
I want us to compete for that great mass of voters that want a party that will stand up for working Americans.”
—Paul Wellstone

Occupy Wallstreet? was attacked and destroyed by the 1%? yes the 1% knows hell is a coming, history has a way of repeating it self!

The forceful executive, Henry Ford II, and the leader of the automobile workers union, Walter Reuther, both saw many examples of advanced machinery operating at the plant. The words they exchanged brilliantly encapsulated the paradox of automation:

Henry Ford II: Walter, how are you going to get those robots to pay your union dues?

Walter Reuther: Henry, how are you going to get them to buy your cars?

Furman dodged all the main points of Piketty’s book, as one expects. I very much doubt he read it, as people at that level don’t have time to read and give the work to assistants, who already know what the boss wants to hear. I actually read it in preparation for Sunday’s aborted book salon with Piketty. I am going to send my introduction to Bev to see whether it wouldn’t be worthwhile posting here to continue the discussion.

The central point about Piketty’s magnificent book is that it is essentially a long commentary on the data base he and his collaborators have assembled on the distribution of wealth and income over a very long period of time (in the case of France, that time is 200 years. The long run of data provides a perspective that you can’t obtain from lower runs, and no one else has any data that would controvert his findings, because they rest on at least 100 years of data. I would say that his finding that increasing wealth concentration is inevitable (short of offsetting taxation) is even more solid than the evidence for global warming. In effect, he did an end run around conventional economics by creating a body of data they can’t deny.

As to the interpretations: there is no productivity justification for the major rise in salary gaps that have emerged in the past 35 years. Goldin and Katz focused on college-vs-high school degree wage levels, which have risen, but this at best accounts for a trivial proportion of the growing inequality of wages, and may well reflect accreditation inflation rather than technologically driven productivity change. Goldin and Katz in fact have a hard time giving quantitatively significant concrete examples of technologically driven wage gaps. As to the high end, there is absolutely no correlation between the productivity of ‘super-managers’ and their salaries (and in fact, no way ever to establish what that productivity is.) The highest correlation is between compensation and the pure hazard of movements in stock prices unrelated to executive action. He notes that the falling marginal tax on extremely high incomes has made it easier (and more profitable) for executives to extract excessive payment from the corporate boards.

A major point in the book is that these salaries are essentially determined by social norms, which differ significantly as between the US and Europe (except Britain, which is a US branch plant).

In any event, Furman hasn’t read the book. What I find amusing and informing is the deafening silence of commentators from the Chicago school. They know they got outflanked. It’s like the French in May and June, 1940. It is going to take time to mount a counter-attack. In the mean time the best attack they have been able to mount so far is on his person.

Who better to throw cold water on Thomas Piketty’s work on inequality — claiming the work is weak because it fails to account for unknowable changes in “inequality within labor income” — than Jason Furman?

Raised in a posh neighborhood in New York City, Jason Furman and is the son of Jay Furman, a real-estate and shopping mall developer who donated more than $20 million to NYU and serves on its board of trustees. His mother, Gail Furman, a child psychologist, heads the family’s Furman Foundation, Inc., which funds mostly left-leaning nonprofit groups.

Furman graduated from the Dalton School in 1988.

He graduated Harvard in 1992, with a B.A. in social studies, and attended graduate school at the London School of Economics, where he received an M.Sc.

Furman returned to Harvard, where he received an M.A. in government in 1995 and a Ph.D. in economics in 2003.

Furman and his wife Eve Gerber live in Washington, DC, with their two children, Henry and Louisa. The family also maintains an apartment in Greenwich Village.

In recent years, Furman worked as a budget expert at the Brookings Institution. There, he worked with former Clinton Treasury Secretary Robert Rubin and directed the Hamilton Project, an economic policy research group that develops policy proposals to achieve shared economic growth.

Furman also been a Visiting Scholar at New York University’s Wagner Graduate School of Public Service, and has been a visiting lecturer at Columbia and Yale Universities.

Since Jason Furman has never felt the sting of inequality in his charmed and privileged life, he can afford to be aloof and objective and theoretical in his criticism Piketty’s thesis.

That’s what I was thinking. Unless they’ve got a robot to prep, take orders, AND clean I’m thinking they’ll not be replacing nearly as many jobs with automation as they think. Generally, technology changes the employment landscape, it doesn’t eliminate it.

I agree. This isn’t something coming its something already here for millions and its growing worse by the hr. Take a look at the actual % no. of people working today to get a real feel for how bad things are today. Its lower today then it was in 1932 at the height of the Great Depression. The Gov’t wants us to only look at the falling unemployment nos. because it makes what they’ve been doing look like its been working. It hasn’t, the level of desperation and misery is rising as is the poverty nos.

My big concern for a minimum income is that it is being sold as a way to eliminate the social safety net. I’m trying to picture what kind of life a kid that has parents that can’t or won’t budget gets if we eliminate things like food stamps and replace it with money.

My big problem with the minimum wage increase is the arbitrary way DC seems to determine it. They don’t seem to take into account the median cost of housing or how much of an average budget the law they passed is going to cost Joe Average for health care. It’s like $10.10 is what we can politically sell. This isn’t a political thing, it’s real people’s lives they are playing with.

Our public library here received the “Capital” book Saturday and I quickly snatched it up, but somebody else contacted the library and requested it, so I was a “good sport” and relinquished it to them. It’s just as well, since I read where FDL is rescheduling the book salon discussion for another time. I’ll watch for that new date and I’ll place a hold on the book; in the meantime, NYT and other papers are posting up new articles daily, and also please be aware that a petition is circling with regard to a publisher’s requested take-down of the English translation of writings by Marx and Engels due to possible copyright infringement (? – sorry, I only briefly scanned the posted information about this, but it’s out there. I think I saw it while looking at #piketty on Twitter). Anyway, I’m trying to get back on this “FDL blog-comment-posting horse”, and I’m having difficulties with both time constraints and some sort of writer’s block trouble that I didn’t use to have in previous times…so please bear with me as I try to work my way back into the proverbial saddle again without falling on my tush or worse… ;^) I feel I need to find a way to write here that is more than the usual comments but less than a full-blown diary posting, and that is what I’m attempting to ease my way into if at all possible. Until later…